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Papers > Business > financial analysis of NH Hotels 2003
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financial analysis of NH Hotels 2003 |
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EXECUTIVE SUMMARY This report is a financial analysis of the NH Hoteles hotel company from the viewpoint of financial analysts wishing to purchase shares in the hospitability-leisure business. Along with NH Hoteles, we chose two American hotel chains, Hilton and Marriott, and one European chain, Accor as industry alternatives Our conclusions follow: · The global travel industry has bottomed out since the dreadful years of 2001 and 2002 and is improving. · NH Hoteles financial rations do not show great improvement over the past two years, but suggest a solid company that can survive in difficult economic conditions. ... · Comparison with companies in the same market sector, combined with the trends in market improvement suggest NH Hoteles’ relative financial health make it a strong candidate for acquisition, but the stock price will continue to under-perform its rivals. · Further analysis will be necessary to identify the possible acquisition price and the relation to the current share price. TABLE OF CONTENTS SECTION TITLE PAGE I Introduction 4 II Industry Background 5 III Overview of NH Hoteles 6 IV Presentation of Financial Reports 7 V Financial Ratios 9 VI Financial Analysis 10 VII Comparative Analysis 11 VII Recent Developments 14 IX Conclusion 15 X Bibliography 17 LIST OF TABLES AND GRAPHS TYPE TITLE PAGE Graph I NH Hoteles Expansion 6 Table I Financial Ratios 9 Graph II ROCE 12 Graph III Profitability 13 Graph IV P/E Ratios 14 Graph V 2003 Stock Prices 14 I. ... In terms of fundamental analysis we are looking for a moderate gearing ratio, sustainable liquidity ratio, and moderate to good ROCE and asset utilization ratios. Our analysis of NH Hoteles share price started with the articulation of a desired set of fundamental financial ratios using macro level information about the hotel and the leisure industry and the global equity markets. We then compared NH Hoteles and competitors with these targets to estimate future performance and to identify strong performers within the sector. We used the annual reports of all companies analyzed for 2002 and 2001 as well as more recent information mainly from the Internet and equity markets for 2003 data. ... To accommodate these tourists European hotel chains have been and still are building more hotels. ... (Lye, 2003) However big the companies have become, they all felt the economic bubble bursting. ... The Economy started to improve in mid 2003 after the war in Iraq ended quickly without major international terrorist incidents. However according to Klancnik (2003) the number of visitors to Europe is still down 15%, because of the fear of terror attacks and the strong position of the Euro. ... OVERVIEW OF NH HOTELES NH Hoteles is a Spanish hotel chain based in Madrid and is become the fastest growing chain of Europe and became third largest business hotel group in Europe 2002. Following the acquisition of the Dutch Krasnapolsky chain in 2000, the Mexican Kristal chain in 2001 and the German Astron chain in 2002 it has currently 242 hotels in operation, with 34,876 rooms in 16 countries, in Europe, Latin America and Africa. NH Hoteles employs more than 12000 employees with 78 different nationalities. (NH Hoteles 2003) The European Business market is the major market NH Hoteles is operating in. It is targeting this market with 4 and 5 star hotels in the major cities of Europe. |
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Title: financial analysis of NH Hotels 2003
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